Bankruptcy provides you with numerous benefits, such as relief from creditor calls, time to reorganize your finances and relief from certain debts eligible for discharge. On the other hand, some temporary setbacks also occur.
Your credit rating will take a hit, but overall, it’s better than a continuous downward spiral that tends to happen when debts are overwhelming and go unpaid. Lenders and other creditors may be gun shy about extending you credit or lending you money for quite some time. For instance, if you want a home equity loan post-bankruptcy, you could find it challenging, but not impossible, to receive one.
Nothing is impossible
The truth is that you will encounter some resistance to receiving a new home equity loan after a bankruptcy, but those obstacles are usually temporary. You may have to wait for some years, usually three to five, before lenders will consider giving you a loan. Once enough time has passed, you may find lenders willing to do so. You might do well to use the time wisely. Rebuild your credit in other ways in order to boost your credit score.
In contrast to a first mortgage loan on your home, home equity loan lenders have more freedom to offer loans to customers. Once you apply, you may find that the interest rates are not the most advantageous ones. Even so, you could still end up getting a loan. However, you may want to carefully consider attempting to obtain one to help avoid getting into additional financial trouble.
Rebuilding your credit
One of the advantages of bankruptcy is having the ability to start over financially. Rebuilding your credit takes time, but if done right, you may find it easier to receive loans and credit in the future. It doesn’t matter whether you file Chapter 13 or Chapter 7. If you are like other Milwaukee residents, you will take full advantage of the opportunity do things differently. Even if your bankruptcy resulted from some catastrophic event, such as an illness or injury, job loss or divorce, the potential to remake your financial life exists.
The majority of the frustration in starting over is knowing where to begin. Whether your bankruptcy is over or has just begun, you may find it useful to consult with an attorney with experience in bankruptcy and helping people like you rebuild their credit afterward.